ADDIS ABABA (Reuters) - Ethiopia and Eritrea agreed to resume flights, open embassies and develop ports together on Monday, the most concrete signs of a rapprochement that has swept away two decades of hostility in a matter of weeks.

The announcements came a day after Ethiopia's new reformist Prime Minister, Abiy Ahmed, flew to neighboring Eritrea, and embraced its veteran President Isaias Afwerki on the runway. Both said they would focus on love and peace.

Abiy came to office in April and announced a series of reforms that have turned politics on its head in his Horn of Africa nation, ending a state of emergency, releasing prisoners and announcing plans to partially open up the economy to foreign investors.

He also opened peace talks with Eritrea, 20 years after the neighbors started a border war that killed an estimated 80,000 people. Full-blown fighting ended in 2000, but their troops have faced off across their disputed border ever since.

Isaias and Abiy signed a "joint declaration of peace and friendship" on Monday, Eritrea's information minister said. He posted an image on Twitter of the two men sitting at a table in front of their flags.

Ethiopia's state broadcaster said they had "agreed to participate in the development of ports" - potentially a huge economic boost for both countries, particularly landlocked Ethiopia which is one of Africa's fastest growing economies.

Ethiopia's foreign ministry said the governments would sign agreements later in the day "on the opening of embassies in Addis Ababa and Asmara that will mark the restoration of diplomatic ties, inauguration of flights between the two capitals, phone connections, and the use of ports."

Ethiopia's dollar-denominated bonds rose to their highest in 10-weeks on Monday.